The head of a Russian mobile advertising firm said earlier this week that Superphone had registered the smiley as its trademark and would sue companies that did not pay for the right to use the image in advertising.
Oleg Teterin said his firm would offer a year-long license for smiley faces for "several dozen thousand dollars."
Market players quoted by Kommersant daily on Thursday said Superphone was unlikely to find "fools" willing to pay for the use of the image, believed to have originated in the United States in the 1960s. It was also one of the symbols of Britain's acid house movement in the 1980s.
A Rospatent official said the image had been incorporated in a letter in the company's brand name.
"The smiley does not identify the company and cannot be used as its trademark and cannot be registered as such," the official said adding that smiley faces are often used as elements in other brand names.